Cloud Peak and BNSF amend transportation agreement

US coal company, Cloud Peak Energy, has entered into an amended transportation agreement with rail operator, BNSF, that eliminates both parties’ volume obligations for the period 2016 – 2018 in exchange for a series of payments.

Under the amended agreement, Cloud Peak has made an upfront payment to BNSF and has the right to make payments from 2016 to 2018, replacing the previous take-or-pay commitments during this period.

“We appreciate our constructive relationship with BNSF and their willingness to work with us in recognition of current extremely depressed international prices,” said Colin Marshall, President and CEO of Cloud Peak.

The new agreement follows a similar deal with coal export terminal, Westshore Terminals, and comes as the competitiveness of US coal exports has been hit by low prices on the international coal markets and a strong US dollar relative to other producer currencies, such as the Australian dollar and Indonesian rupiah.